When the time comes to raise the rent of a tenant for a specific property, this must be handled just right. If not, you could get yourself in trouble or end up with an empty property. Here are a few things to consider when it's time to raise rent.
The first step is to figure out what you should be charging to rent the property. You want to look at other rental properties in the area that match closely with yours. Make sure you look at five or more properties to ensure you get an accurate estimate.
The best estimate will come from looking at rental properties very similar to yours, as far as the number of bedrooms, bathrooms, square footage and features. It's also important to look at the age of the property compared to yours.
If the property is occupied and you want to raise the rent, you will need to wait until the end of the lease period. Once the lease has expired, you will need to make sure you comply with the state law about increasing rent. Most states make you notify the tenant 30 or 60 days in advance
You want to put the information into an official written notice and keep a copy of the notice for your records. The notice should be delivered via certified mail or hand delivered. You can also send a follow-up email or letter to the tenant.
As you decide to raise rent, you should consider some of the things that could get you into trouble. You cannot raise the rent in discrimination against a tenant for gender, race, religion, familial status, sexual orientation, age, national origin or disability. If you raise the rent to high, it may look like you are trying to push out a tenant you don't like.
It's also important to avoid raising rent in retaliation. This can happen when you want to force a tenant out because of repairs or actions. Maybe the tenant reported you for building code violations or another reason. Often, the courts will side with the tenant in this type of case and you will be in trouble with the law.
Make sure you raise the rent in a fair way and not for any other reason than the market value of the property. It's also important to comply with any state or local laws.